PTO vs vacation: what is the difference?

Are you ready for a vacation? 

Just imagine — beach, sand, palm trees, your favorite cocktail in one hand and ice cream in the other. The sun is shining, you’re feeling a summer breeze on your face, and you’re perfectly relaxed.

But, before you clock off from work and head to your well-deserved break, you need to request vacation days. 

Or is that a PTO request? 

Is there a difference?

In this blog post, you’ll learn:

• What PTO is, 
• The difference between PTO and vacation, and 
• The answers to the most frequently asked questions regarding taking time off.

What is PTO?

PTO is an abbreviation for paid time off — it’s an employee leave policy that refers to the time you take off from work with no loss of pay. 

In some companies, PTO includes vacation days, sick days, personal days, and holidays, all in one. In other companies, these leaves are treated separately.

There are different PTO policies:

• Accrued days: The number of days off an employee is allowed to take is directly proportional to the number of days the employee has worked. It’s up to the company how many days off they get to accumulate each week or month.
• Bank of PTO: Employees are offered a fixed number of leaves all at once. The number usually resets on January 1st or, in some instances, on the dates the employees started working. With this policy, there is no separation between categories (vacation, sick leave, personal days off). This is the most common PTO system.
• Unlimited PTO: Employees can take time off whenever they need it, as long as it doesn’t interfere with their work. There’s no maximum number of days they can take. Unlimited PTO is a relatively new concept and very few companies have this policy.

A good PTO policy can be one of the main benefits that will attract potential employees — so, it’s something companies need to invest time and effort in. 

In fact, many employees would accept slightly lower pay in exchange for a generous PTO plan.

What is a vacation?

Vacation generally refers to a paid time off from work that you can take to rest and recharge. 

Vacation time is crucial in helping people achieve work-life balance — since it gives employees enough room to spend quality time outside of work. But, according to the FLSA, employers in most US states are not required to offer vacation to their employees. 

However, this doesn’t mean that your employer will not decide to offer you some time off — they might not be required to give you vacation time, but they are allowed to if they want. 

What is the difference between PTO and vacation?

Sometimes, these terms are used interchangeably. 

But, as you may have guessed, they’re not the same. 

There are many differences between PTO and vacation — from the level of flexibility that comes with these two types of leave to the difficulty of keeping track of them.   

Let’s take a closer look at what exactly makes them different:

PTO	Vacation
PTO includes any paid time off. 1. Vacation 2. Sick days 3. Maternity/paternity leave 4. Personal days 5. Mental health days 6. Bereavement 7. Jury duty 8. Volunteer work	Vacation is a period specifically designed for taking a break from work.
PTO offers a high level of flexibility — since employees can use their PTO however they see fit.	Vacation time is less flexible — since employees need to use their leave based on the vacation policy.
PTO allows more privacy — since, when requesting PTO, employees usually don’t need to state the reason behind their request.	Vacation time does not allow a lot of privacy — since most employers usually expect a more detailed explanation for requesting vacation time.
With PTO, employees are allowed to take shorter but more frequent breaks from work — since they don’t always have to explain why they’re taking time off.	Vacation usually refers to longer breaks from work (up to 22 days per year).
PTO is easier to track — since one single policy covers several different types of leaves.	Vacation days are usually offered separately from sick days and personal leave — so they are more complicated to keep track of.

10 most frequently asked questions about PTO and vacation 

There are some frequently asked questions about PTO and using your vacation days — we’ll try to clear away any confusion.

#1 Is PTO better than vacation?

Is it better to have a PTO plan (e.g. a bank of PTO) or separate vacation time? 

Well, each has its pros and cons.

• PTO plans allow more flexibility and privacy — as employees don’t have to disclose why they are taking the time off work.
• But, switching to a PTO plan could result in having fewer days off, as well as using them up quicker — because employees might end up using all their PTO days on vacation and not saving up any in case they get sick.
• Still, PTO ensures that everyone has access to the same amount of time off, based on the time spent working in the company.
• A bank of PTO is better in multicultural environments, as it’s more inclusive. It allows each employee to take time off to celebrate their holidays — even if they’re not widely celebrated in the country or city they live in.
• Also, PTO is less of an administrative headache since it covers different types of leave. This way it’s much easier to keep track of employees’ time off.

#2 Does my company have to give me PTO?

In case you live in Europe, you’re entitled to at least 20 days of time off per year. 

On the other hand, if you live in the US, it’s pretty much the same as with vacation time — your employer is usually not legally required to give you PTO. 

However, since an increasing number of US employers are becoming aware of the importance of preventing burnout and taking a break from work, 45% of private industry workers had access to PTO in 2021. 

#3 How far in advance should I request time off?

As far in advance as you can — the earlier the better.

But, keep in mind that it’s best to consult the employees’ handbook to see when you can request time off. 

Some companies require two weeks’ notice, while in others you need to place your request at least 30 days in advance. In some companies, you need to submit a request 3 or 6 months earlier.

#4 What happens if I don’t use my PTO?

First of all — you should definitely use your PTO. 

Life is not just about work and taking time off is beneficial to your mental health and overall well-being. 

Also, being overworked affects productivity  — and not in a positive way.

If you firmly decided that you don’t want to use those days off, these are the possible options:

• All days you haven’t used (or at least some of them) will carry over into the next year,
• You will be able to “cash them out”, or
• You will lose them — that’s the so-called Use-It-Or-Lose-It policy.

It’s very likely, however, that it won’t be you who’ll get to decide between the three — but your company’s policy or the laws in your state.

#5 What happens if I don’t use my vacation days?

In case your employer offered you paid vacation and you decided not to use it, what happens next mostly depends on what’s stated in your employment contract. 

Some companies allow employees to carry over their unused vacation days into the next year. Others expect their employees to use their vacation time by the end of the year. 

Keep in mind that in some states — such as California — employers are required to pay you for any unused time off. 

So, make sure to check your state labor laws for more information on vacation time. 

#6 How many days of time off is normal?

“Normal” differs from country to country.

In the US, the average number of PTO for private-sector employees who have completed one year of service is 10 days, according to the Bureau of Labor Statistics (BLS). That number doesn’t include sick days and paid holidays. The average number also depends on the industry, years of service, and region. 

But, in case your company does not offer any paid time off, as a US worker, you’ll probably be entitled to 10 public holidays only. 

In other countries with advanced economies, the amount of paid time off is defined by labor law. 

Most countries in the world have an average of 20 days of minimum annual leave — not including paid public holidays. 

Some countries have as many as 30 days — like the following:

• Andorra, 
• Bahrain, 
• Burkina Faso, 
• Kuwait, 
• Panama, 
• Peru, and 
• the United Arab Emirates.

#7 Can I use my PTO or vacation days whenever I want?

The general answer to these questions is the following — it depends on where you live and what company you work for. Keep in mind that time off rules are not universal — so, always double-check your company’s policy.

However, you should generally be able to use PTO whenever you want, given that you got the approval from your supervisor. Your days off may not be approved if that period is particularly busy or another coworker is off work at the same time.

If you’re a new hire, you may have to wait a certain amount of time before you can start using your PTO — usually around 6 months.

#8 Can I be forced to work during PTO or vacation?

Generally, no — but it depends on your contract (I hope you read the fine print too).

#9 Can I take time off if I don’t have any PTO or vacation days left?

What happens if you run out of your time off? 

Can you still take a break from work?

Well, you can take unpaid time off (UTO). 

As the name suggests, it’s the time taken off from work not compensated by an employer. 

UTO policies, just like PTO policies, differ from company to company — some may offer it instead of PTO. 

That is frequent in countries such as the US, where employers have no legal obligations to provide paid vacation time.

Another alternative is to make up for a lost time, in case of a short absence. 

That requires staying late hours, coming in earlier than usual, or working on your usual day off to balance out the sum of your working hours per week. 

You just need to check if your place of work allows for that arrangement.

#10 Should I track my time off?

Tracking your time off makes it easier for your managers to stay on top of your overall balance and organize work accordingly. This way they’ll know exactly when each employee will be absent from work. 

But, using a PTO tracker can make your workdays a lot easier, too. 

Since tracking your time off gives you a visual overview of both accrued and the time off you have available, you’ll always be able to plan your time off in advance and balance your private life and work more efficiently. 

Some time off trackers, such as Clockify, give you the option to request time off, which saves everyone a lot of time and trouble. 

As soon as a new time off request shows up, your manager will receive an email notification and they’ll be able to approve it. 

Conclusion: Double-check first, request your time off next

PTO and vacation may seem like two peas in a pod. But, as you may have guessed just by reading the title of this blog post — they are not the same. 

So, the next time you start getting ready to book a flight or plan for a long weekend, you’ll know exactly which type of leave to request.

But, since time off policies usually vary from company to company, it’s always better to double-check the general information provided online.

Still, two things are for sure:

1) It’s important to be informed about the time off policy in your company, and 

2) Not using your days off and taking some time to relax is a mistake. You deserve that break!

✉️ Which one do you prefer — PTO or a separate vacation policy? What do you see as the benefits of your preferred time off policy? Let us know at blogfeedback@clockify.me, and your answer may be featured in one of our future articles.